The power of plastic: a key forecaster shares his vision for the campus card. Are you ready for the changes? - Trend report: campus cards

University Business, July-August, 2002 by Jean Marie Angelo

Now that colleges and universities are tying cards to Web pages that track on- and off-campus purchases, the campus ID card is becoming an e-card, says campus card analyst Bob Huber. He should know: As president of Robert Huber Associates, and primary resource for the company's related Web site, allcampuscard.com, he tracks card use and new applications. His current forecast covers the following trends to watch:

The industry is experiencing a new wave of vendor turnover, says Huber. There are at least several dozen card vendors in a field that, just a decade ago, consisted of three major suppliers. The majority of these vendors have introduced new systems during the past two to three years. The number of options is "dizzying," he says, adding that he expects more companies to follow the lead of CyberMark (www.cybermark.com), a chip card company that is handing off its higher education business to ITC Systems (www.itcsystems.com). More ID card vendors will either merge or exit the higher ed industry altogether in the coming months, adds Huber, which is why administrators have to grill vendors about long-term plans and how they are building their systems. This may prevent the initiation of a relationship doomed to fail.

There'll be more "system shopping" as vendors set higher prices. It is especially important to analyze maintenance costs, says Huber; they may soon cost more. Currently, in the card industry, annual maintenance costs usually amount to 15 percent of the value of a system. But the percentage is rising dramatically for some card clients. Blackboard clients told University Business that they are already seeing maintenance cost increases. The University of Delaware, which has been paying Blackboard $23,500 annually for maintenance on its ID card system (approximately 425 readers) will be paying twice or even three times its usual annual ante this year, says Earl Davis, coordinator of the university's card system. "Blackboard explained in writing that the company must increase maintenance costs because it needs to spend more on R&D of the ID card products," he says. Blackboard purchased its campus ID card system from AT&T just two years ago, and management says it is just now bringing maintenance costs in line with where they should have been, prior to the acquisition of the business from AT&T. Still, says Huber, Blackboard clients are experiencing sticker shock.

More schools will consider "self-maintenance" for cost savings. Duke University in North Carolina (purveyor of the DukeCard) and Indiana's Purdue University (which issues the OneCard) are two schools already maintaining some of their own campus-card readers, Huber reports. Schools of this size are supporting 100 to 200 system-wide card readers for security access, vending machine sales, and other applications. "They buy some readers and install them themselves, but pay the vendor to teach them how to fix the technology," he discloses. At one time, says the analyst, vendors fought this trend because they only saw the downside: less revenue coming in from service contracts. But, he points out, they've since realized they can reduce the size of their own maintenance staffs or outside contractors by helping campus clients become more independent.

Campus-card deposits via the Web will explode. Now that students and their parents are comfortable with online banking, they're requesting some type of electronic relationship to the campus card system, says Huber. Several schools, he says, have blazed the trail for the e-card, which allows students to move money online from a traditional bank account into a campus-card account. Quinnipiac University (Hamden, CT) has just such a setup for its Q-Card, through www.qcardonline.com. Via the link (added to the campus-card system earlier this year), parents can make deposits to campus-card accounts, and students can review their spending activity and balances. Quinnipiac has seen a marked decrease in foot traffic at the bursar's office, says John Meriano, director of Administrative Services at the school. Now, students make only about 200 in-person deposits monthly at the bursar's office, while about 5,000 to 6,000 transactions are made each month online and at a kiosk on campus known as a "value transfer station." "At certain times of the year, there was a line out the door at the bursar's office," recalls Meriano. "At the beginning of each semester, for instance, students would be cramming money into accounts to cover book fees and other costs." Those student queues have since evaporated, he says.

Emory University (Atlanta) and Skidmore College (NY) have recently set up similar Web sites that serve campus card users, says Huber. But the proliferation of the campus e-card won't drive any sort of trend to turn the campus ID card into a true banking ATM card, he says.

Peter Livingston, chairman of Stark/livingston, higher ed consultants (www.starklivingston.com), cautions that some schools have been there, done that, and haven't realized great gains. Bank names and policies change too quickly to allow for large numbers of IHEs to keep track of them, he explains, adding that years back, certain national banks and local credit unions entered partnerships with campus-card programs, then changed their minds about linking accounts to campus-card accounts. Those institutions balked at serving the student accounts, which tend to be maintained at lower balances than other accounts. The about-face only created logistical headaches for card administrators, he says.